… Pegs 10 cent per kilowatts hour as maximum selling price
Barely two weeks after the commissioning of the nation’s first Hydro-Solar Hybrid power generating system, which includes a 5 Megawatts (MW) floating solar system, the first in West Africa, the Bui Power Authority (BPA) has been inducted into the West Africa Power Pool (WAPP) to afford it the opportunity to sell its excess electricity in the sub region.
Disclosing this to the B&FT in an interview, the Chief Executive Officer of BPA, Fred Oware, said the by the end of this month the Authority would receive its license to become a full member of WAPP.
The move has set the tone for BPA to begin the sale of excess energy to external consumers as the coming on stream of its solar projects has resulted in the generation of more electricity, exceeding supply terms with the Electricity Company of Ghana (ECG), its first off taker:
“The records indicate we have exceeded the Power Purchase Agreement (PPA) by 200 gigawatts of energy. With this, we are talking of a 100 megawatts plant capacity of solar” Mr. Oware said.
Excess Power Generation
Per the PPA, Bui Power Authority should supply the ECG, 1,030 gigawatts of energy per annum at a rate of 10 cents per kilowatts hour. Last year, the BPA supplied about 1,100 gigawatts, making it 70 megawatts in excess of the required power supply. This year, as of yesterday December 14, 2020, the BPA had already supplied 1,203 gigawatts and is projecting 1,250 by end of year.
The BPA is optimistic that the ECG would pay for the excess power supplied but not at 10 cents per kilowatts hour as the contract demands. The development would mean BPA might not be able to generate enough revenue to offset investments that have been made into its solar projects, reason it is geared to sell to the sub region.
“We are running a business; we are looking at our investments and we say that if we get anything lower than 10 or 8, how long would it take us to pay for the investments; maybe 30 years. Therefore, you need to be looking elsewhere and that is exactly what we are doing,” Mr. Oware added.
Preparation towards export
The BPA has streamlined its operations to cater for its new focus; the renewable unit at the authority is being escalated into a department. A business development unit is being set up to position the company to attract bulk electricity purchaser locally and internationally.
“We have priced our solar not to exceed 10 cents per kilowatts hour and that’s what we are looking at, and of course, if we have opportunity to sell higher than that, we will do that,” Mr. Oware intimated, adding that, even at 10 cents per kilowatts hour, the nation’s power would be on the high in the sub-region.
He was however emphatic that, even with their eyes on the sub regional market, the authority would ensure that it also satisfies all local needs.
World Bank price analysis
According to the World Bank, only 50 percent of the population has access to electricity – and an unreliable supply at best. Power supplies suffer from an average of 44 hours of outages per month and are among the most expensive in the world with prices averaging about 20 cent per kilowatt-hour. West Africans pay about twice as much for electricity as their neighbors on the eastern side of the continent, and for those living in the region’s fragile states, prices can be as high as 40 cents per kilowatt-hour.